Candlestick formation · Bullish
What is it, in one line
A candle isolated by a gap down before it and a gap up after it, leaving it stranded at the low.
Bullish · 3 candles · verdict: rule and thresholds below
A candle isolated by a gap down before it and a gap up after it, leaving it stranded at the low. The engine checks the formation as an executable condition over open, high, low and close, with a trend filter applied before the count is kept.
Method
Three candles. Price gaps down into the middle candle and gaps back up out of it, so the middle candle's range shares no price with either neighbour. The isolated bar is the island. It is a stronger claim than either window alone because the market has abandoned that price band in both directions.
The traditional claim
Treated as a major bottom signal, on the reading that the gap out reverses the gap in and traps everyone who sold the low.
How this detection is wrong
Both gaps must clear the ATR floor. Testing only one of them turns this into an ordinary window with a coincidence attached, which is the most common way island counts are inflated.
Published so the count can be reproduced. Every figure below is a parameter of the rule, not a preference: change one and the occurrence count changes with it.
| Parameter | Meaning | Default |
|---|---|---|
| trendPeriod | bars of prior trend inspected | 5 |
| atrPeriod | bars of ATR used to size everything below | 14 |
| minGapAtr | gap between bars, at least, in ATR | 0.15 |
| maxPriorSlope | prior slope must be below | -0.5 |
These share enough geometry that a detector can return more than one of them on the same bar. The engine reports every match rather than picking a winner.
What is a Bullish Island Reversal candlestick pattern?
Three candles. Price gaps down into the middle candle and gaps back up out of it, so the middle candle's range shares no price with either neighbour. The isolated bar is the island. It is a stronger claim than either window alone because the market has abandoned that price band in both directions. The detector also requires a prior downtrend, so the same shape in the wrong context is not counted.
Is the Bullish Island Reversal bullish or bearish?
It is read as bullish. Treated as a major bottom signal, on the reading that the gap out reverses the gap in and traps everyone who sold the low.
When is a Bullish Island Reversal not a Bullish Island Reversal?
Both gaps must clear the ATR floor. Testing only one of them turns this into an ordinary window with a coincidence attached, which is the most common way island counts are inflated.
How is a Bullish Island Reversal detected?
As an executable rule over open, high, low and close, with 4 named parameters — including bars of prior trend inspected 5, bars of ATR used to size everything below 14, gap between bars, at least, in ATR 0.15 — all published on this page so the count can be reproduced. Strict and loose variants are defined as well, so the sensitivity of the count to those thresholds is visible rather than assumed.
Measurement pending re-run
No hit rate is published here yet. The run that would supply one was computed on engine ca6d9e36c81c; the engine is now cfb08765de7c. Its candlestick rows included the still-forming bar, and it predates the chart formations entirely, so those figures have been withdrawn rather than published with a caveat. The definition above is unaffected: it is what the detector tests, and no re-run changes it.
Same shape, opposite reading
The shapes are close, and the prior trend is what decides which one fired: this rule requires a preceding downtrend, its mirror a preceding uptrend.
Bearish Island Reversal: A candle isolated by a gap up before it and a gap down after it, leaving it stranded at the high.